Bytedance may sell a majority stake in TikTok

It is unclear whether the Trump administration would consider such a plan enough to defuse what it views as the national security risks of ByteDance’s ownership.

For now, ByteDance faces pressure on multiple fronts in the United States, caught in an intensifying cold war as Trump blames Beijing for the spread of the coronavirus, for fights over control of the South China Sea and for reciprocal bans of journalists in each country.

ByteDance now stands alongside Huawei, the telecommunications giant, as a major target of the Trump administration’s campaign against Chinese tech companies on national security grounds.

Last year, the federal panel that reviews transactions for national security began examining ByteDance’s 2017 acquisition of Musical.ly, the American app that became TikTok. Sen. Marco Rubio, R-Fla., and other lawmakers had expressed concerns over potential censorship within the app, as well as any sharing of TikTok user data with the Chinese government.

The panel could ultimately order ByteDance to divest Musical.ly’s American assets or at least change how it transfers and stores data around the world.

In February, Sen. Josh Hawley, R-Mo., criticized what he called a “pattern of secrecy” around ties between China and TikTok and Apple. This month, Secretary of State Mike Pompeo said the administration was considering banning Chinese social media apps on national security grounds.

In response, TikTok announced that it would evaluate changes to its corporate structure.

Criticism of TikTok’s Chinese ownership is a bipartisan issue: A defense-spending bill approved by the Democratic-controlled House this week includes a provision that would ban use of the video app on government devices.

This month, Amazon told its employees to delete TikTok from their phones, citing security concerns, but backtracked hours later. Other companies, including Wells Fargo, went through with the bans. Branches of the U.S. military have barred personnel from using the app.

The United States is not the only country to express reservations about TikTok. India banned the app and dozens of other Chinese services last month over national security concerns.

ByteDance has rejected claims that it is a national security risk, saying TikTok is run separately from its Chinese operations and pointing out that the app is unavailable in China. In recent weeks, the app has enlisted a bevy of lobbyists to press its case in the halls of Congress, although its executives have declined to testify before lawmakers.

ByteDance also hired Kevin Mayer, a respected American senior executive at the Walt Disney Co., as TikTok’s chief executive this year. Peter Navarro, a senior White House trade official, has since called Mayer an “American puppet” for ByteDance.

Despite the concerns, TikTok has only grown, fueled by young people and the boredom of those quarantined at home during the coronavirus pandemic. The app has been downloaded 1.9 billion times — 172 million times in the United States — according to SensorTower.